XML 166 R54.htm IDEA: XBRL DOCUMENT v3.22.4
MD&A - Capital management
 12 Months Ended
Dec. 31, 2022
Entity [Table]  
Disclosure Of Objectives Policies And Processes For Managing Capital Explanatory
An adequate
 
level of common
 
equity tier 1 (CET1)
 
capital and total
 
loss-absorbing capacity (TLAC)
 
meeting both
internal assessment and regulatory requirements
 
is a prerequisite
 
for conducting our business
 
activities.
We
 
manage
 
our
 
balance
 
sheet,
 
RWA,
 
leverage
 
ratio
 
denominator
 
(LRD)
 
and
 
TLAC
 
ratio
 
levels
 
based
 
on
 
our
regulatory requirements,
 
within our internal limits and targets,
 
and our externally provided guidance. Our strategic focus
is on achieving an optimal
 
attribution and use of financial
 
resources between our business divisions and Group Functions,
as well
 
as between our
 
legal entities, while remaining within
 
the limits
 
defined for the Group
 
and allocated
 
to the
 
business
divisions
 
by
 
the
 
Board
 
of
 
Directors
 
(the
 
BoD).
 
These
 
resource
 
allocations,
 
in
 
turn,
 
affect
 
business
 
plans
 
and
 
earnings
projections, which are reflected
 
in our capital plans.
The annual
 
strategic planning
 
process includes
 
a capital-planning
 
component that
 
is key in
 
defining our
 
capital targets.
It is based on an attribution
 
of Group RWA and LRD
 
internal limits to the business divisions.
 
Limits and targets are
 
established at the Group
 
and business division levels,
 
and are approved by
 
the BoD at
 
least annually.
In the target
 
-setting process
 
,
 
we take into
 
account the
 
current and
 
potential future
 
TLAC requirements,
 
our aggregate
risk exposure
 
in
 
terms of
 
capital-at-risk, the
 
assessment
 
by
 
rating
 
agencies,
 
comparisons
 
with peers
 
and
 
the
 
effect of
expected accounting policy changes.
Reconciliation of IFRS equity
 
to Swiss SRB common
 
equity tier 1 capital
USD m
31.12.22
31.12.21
Total IFRS equity
57,218
61,002
Equity attributable to non-controlling
 
interests
(342)
(340)
Defined benefit plans, net of tax
(311)
(270)
Deferred tax assets recognized for tax loss carry-
 
forwards
(4,077)
(4,565)
Deferred tax assets on temporary differences,
 
excess over threshold
(64)
(49)
Goodwill, net of tax
1
(5,754)
(5,838)
Intangible assets, net of tax
(150)
(180)
Compensation-related components (not recognized
 
in net profit)
(2,287)
(1,700)
Expected losses on advanced internal ratings
 
-based portfolio less provisions
(471)
(482)
Unrealized (gains) / losses from cash flow hedges,
 
net of tax
4,234
(628)
Own credit related to (gains) / losses on financial liabilities
 
measured at fair value that existed at the
 
balance sheet date,
 
net of tax
(523)
315
Own credit related to (gains) / losses on derivative
 
financial instruments that existed at the balance
 
sheet date
(105)
(50)
Unrealized gains related to financial assets at fair value through
 
OCI, net of tax
0
(68)
Prudential valuation adjustments
(201)
(167)
Accruals for dividends to shareholders
(1,683)
(1,700)
Other
(29)
1
Total common equity tier 1 capital
45,457
45,281
1 Includes goodwill related to significant
 
investments in financial
 
institutions of USD
20
m as of 31 December 2022
 
(31 December 2021:
 
USD
22
m) presented on the balance
 
sheet line Investments in associates.
Our CET1
 
capital
 
mainly consists
 
of: share
 
capital;
 
share
 
premium, which
 
primarily consists
 
of additional
 
paid-in capital
related to
 
shares issued;
 
and retained
 
earnings.
 
A detailed
 
reconciliation
 
of International
 
Financial
 
Reporting Standards
 
(IFRS)
equity to CET1 capital
 
is provided in
 
the “Reconciliation
 
of IFRS equity to Swiss
 
SRB common equity
 
tier 1 capital”
 
table.
 
Our CET1 capital increased by USD
0.2
bn to USD
45.5
bn as of 31 December 2022, mainly as a result of operating
 
profit
before
 
tax
 
of
 
USD
9.6
bn
 
with
 
associated
 
current
 
tax
 
expenses
 
of
 
USD
1.4
bn,
 
partly
 
offset
 
by
 
share
 
repurchases
 
of
USD
5.6
bn under
 
our share
 
repurchase programs,
 
dividend accruals
 
of USD
1.7
bn, negative foreign
 
currency effects
 
of
USD
0.5
bn and compensation- and
 
own share-related capital components
 
of USD
0.3
bn.
›
 
Refer to “UBS shares”
 
in this section
 
for more information
 
about our share repurchase
 
programs
Our
 
loss-absorbing
 
AT1
 
capital
 
decreased
 
by
 
USD
2.3
bn
 
to
 
USD
12.9
bn,
 
mainly
 
driven
 
by
 
our
 
announcement
 
on
5 December 2022
 
that we
 
intended
 
to redeem
 
an AT1
 
capital instrument
 
on
 
31 January
 
2023,
 
the first
 
call date
 
(ISIN
CH0400441280, with a nominal amount of USD
2.0
bn, issued on 31 January 2018; this instrument ceased to be eligible
as AT1 capital when the call was announced in December 2022), a call of a
 
USD
1.1
bn equivalent AT1 capital instrument
denominated in
 
euro,
 
and interest
 
rate risk hedge,
 
foreign currency translation
 
and other
 
effects. This was
 
partly offset
by
 
two
 
issuances
 
of
 
AT1
 
capital
 
instruments
 
denominated
 
in
 
US
 
dollars
 
and
 
Swiss
 
francs
 
amounting
 
to
 
USD
1.8
bn
equivalent.
Our total gone concern loss-absorbing capacity increased
 
by USD
2.7
bn
 
to USD
47.0
bn as
 
of 31 December 2022
and included USD
44.0
bn of TLAC-eligible
 
senior unsecured
 
debt.
UBS AG  
Entity [Table]  
Disclosure Of Objectives Policies And Processes For Managing Capital Explanatory
Reconciliation of IFRS equity
 
to Swiss SRB common
 
equity tier 1 capital
 
(UBS Group AG
 
vs UBS AG consolidated)
As of 31.12.22
USD m
UBS Group AG
(consolidated)
UBS AG
(consolidated)
Difference
Total IFRS equity
57,218
56,940
278
Equity attributable to non-controlling
 
interests
(342)
(342)
Defined benefit plans, net of tax
(311)
(311)
Deferred tax assets recognized for tax loss carry-
 
forwards
(4,077)
(4,077)
Deferred tax assets on temporary differences,
 
excess over threshold
(64)
(262)
198
Goodwill, net of tax
(5,754)
(5,754)
Intangible assets, net of tax
(150)
(150)
Compensation-related components (not recognized
 
in net profit)
(2,287)
(2,287)
Expected losses on advanced internal ratings
 
-based portfolio less provisions
(471)
(471)
Unrealized (gains) / losses from cash flow hedges,
 
net of tax
4,234
4,234
Own credit related to (gains) / losses on financial liabilities
 
measured at fair value that existed at the
 
balance sheet date, net of tax
(523)
(523)
Own credit related to (gains) / losses on derivative financial
 
instruments that existed at the balance sheet date
(105)
(105)
Unrealized gains related to financial assets at fair value through
 
OCI, net of tax
0
0
Prudential valuation adjustments
(201)
(201)
Accruals for dividends to shareholders
(1,683)
(6,000)
4,317
Other
(29)
(51)
22
Total common equity tier 1 capital
45,457
42,929
2,528